Pakistan’s rapidly increasing population has already exploded as an economic “time bomb,” Finance Minister Muhammad Aurangzeb cautioned on Wednesday, as he pledged bold reforms — including achieving a ‘Single B’ credit rating this fiscal year— to stabilise the country’s fiscal path.
Speaking at the 8th Edition of The Future Summit in Karachi, he outlined a comprehensive agenda, covering key economic challenges, fiscal policies, and necessary reforms to stimulate growth.
He said that the credit ratings were upgraded during the first quarter of the fiscal year, indicating that the economic trajectory was right.
“It is hoped that we will move towards a ‘Single B’ during this fiscal year so that we can rejoin the comity of nations,” the FinMin said adding, “Our fiscal and current account deficits have turned into surpluses.”
According to a brokerage report, Pakistan’s credit ratings are expected to improve further due to rising foreign exchange reserves, aiding future bond issuance in global capital markets.
Due to significant improvements in the external account, a steep decline in inflation, and a reduction in interest rates, the nation’s economy is steadily stabilising.
Two rating agencies have already upgraded Pakistan’s rating by one notch, as a first indication of external stability, citing the country’s improving macroeconomic conditions supported by the new International Monetary Fund’s $7 billion loan programme.
Pakistan’s long-term issuer rating was raised by one notch to CCC+ by Fitch in July, and then to Caa2 by Moody’s in August.
Aurangzeb called for enhanced digitisation of the Federal Board of Revenue (FBR) to reduce human interference and curb corruption, a move he said would help streamline tax collection and improve transparency.
“The government has no choice but to increase taxes,” Aurangzeb said and in the same breath add that he was not in favour of additional levies on salaried workers and industries as he deemed themt unfair.
Tying incentives to the targets, the top economic manager urged the private sector to increase its capacity and support efforts to limit the flow of speed money.
The finance czar also underscored the importance of ensuring fair market practices, particularly in controlling prices of essential commodities like poultry and pulses, which he noted have not decreased in Pakistan despite falling globally.
“Where we see anomalies, we will come down hard,” said Aurangzeb, adding that the prices of pulses and chicken would become a standard agenda item in the Economic Coordination Committee (ECC) meetings henceforth.
“If you look at these two food items, internationally their prices have declined, petroleum prices have generally decreased in the last six months alongside the transportation cost. How can we have a 50- 60% increase in the prices of pulses and a 15% jump in the price of chicken?
“We will simply not allow middleman arbitrage,” he said. “We’ll ensure that the benefit of the declining inflation rate, which has reduced from 38% to single digits, gets passed to the person on the ground,” he said.
Aurangzeb expressed a commitment to an export-led economy, stating that this transition is crucial for the country’s economic DNA.
